Competition in Contracting Must be Tailored to Need

March 3, 2013

The Obama administration came to office determined to improve the defense acquisition process. Beginning in 2010, with its Better Buying Power initiative, the Pentagon undertook an effort to improve the acquisition system’s efficiency and reduce the cost of defense goods and services.

A central feature of BBP was the promotion of increased competition among private-sector providers to improve outcomes and lower prices. BBP required greater use of firm fixed price instead of traditional cost-plus contracts.

Unfortunately, some program managers started issuing FFP contracts regardless of the type of work involved. The drive to increase competition also led to an explosion of so-called lowest price technically acceptable contracts and a tendency toward shorter contract performance periods with more frequent recompetes.